Modi and the Indian economy

In Prime Minister Narendra Modi’s second term, India’s much-vaunted growth story appears to be unravelling. The finance ministry estimates GDP growth for the fiscal year ending March 2020 at 5%, which would be the lowest rate in eleven years.

Finance Minister Nirmala Sitharaman’s budget for 2020/21, presented on February 1, offers modest fiscal stimulus as part of efforts to revive growth. Certain measures are designed to lift consumption, long the main driver of India’s growth, and spur greater domestic and foreign investment, held back in recent years by a credit crunch in the financial sector as well as a restrictive regulatory environment.

Modi is meanwhile attempting to reform India’s labour laws reforms, with the avowed aim of stimulating employment and improving the business environment.

However, he is encountering resistance from political allies and opponents alike.

Although exports have never been a key driver of India’s growth, Delhi is trying to redress its trade imbalances with regional partners and expand its trade profile.

India has opted not to join a Regional Comprehensive Economic Partnership, which involves several countries in the Asia-Pacific region, but US President Donald Trump’s upcoming trip to India may see Delhi and Washington agreeing a deal to ease their respective concerns over fair market access.

To what extent does Modi prefer state-directed paradigms over market-based models for developing the economy?

How will Modi balance the demands of economic liberals and economic nationalists within his core support?

What consequences might India face if it again misses its fiscal deficit target?

Is India making progress in its attempts to resolve the crisis of bad debt in the banking and shadow banking sectors?

Can Modi overcome opposition to his labour reforms?

Will the Modi government steer a more protectionist course?

Join us on February 19 to put your questions to our three of our expert advisors.